Reserves and Resources

Reserves

OPTI has a 35 percent working interest in three oil sands properties in the Athabasca oil sands area, with Nexen owning the other 65 percent: Long Lake, Leismer and Cottonwood.

More than 2 billion barrels of recoverable bitumen are estimated to be located within OPTI's oil sands leases.

McDaniel & Associates (McDaniel), our reserves and resources evaluator, has prepared a report evaluating the bitumen reserves and synthetic oil reserves of the Long Lake leases effective December 31, 2009.

The McDaniel evaluation of our Long Lake lands (including Long Lake Phase 1, northern portion of Long Lake lease, and Kinosis, southern portion of Long Lake lease) recognizes the impact of upgrading on the resources. Most of the raw bitumen will be upgraded and sold as Premium Sweet Crude (PSC™) and butane, and is shown as synthetic crude oil or butane reserves. Bitumen will be sold upon start-up of steam assisted gravity drainage (SAGD) operations prior to Upgrader start-up, and thereafter during periods of Upgrader downtime, and is shown as bitumen reserves. The following table shows OPTI’s working interest in the raw bitumen reserves and the corresponding sales volumes at December 31, 2009.

All volumes are millions of barrels.

  Gross Sales Volumes 
2009                                                          
  Raw Bitumen Bitumen PSCTM Butane
Proven1.                                                    194 8 149 3
Proven plus probable2.  711 34 553 8

Proven plus probable plus possible3. 

 780 35 35 9
Notes:                                                                                                                         1. Proven reserves are those reserves that can be estimated with a high degree of certainty to be recoverable.  It is likely that the actual remaining quantities recovered will exceed the estimated proven reserves.
2. Probable reserves are those additional reserves that are less certain to be recovered than proven reserves.  It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proven plus probable reserves.
3. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the remaining quantities actually recovered will be greater than the sum of proven plus probabe plus possible reserves.

Resources

In addition to estimating our reserves, McDaniel has estimated bitumen resources on all of OPTI's lands, including the Long Lake, the Leismer and the Cottonwood leases.  A summary of the additional resource estimates as at December 31, 2009, on a 35 percent working interest basis, before royalties, is shown below:

All volumes are millions of barrels.

 2009 Raw Bitumen1. 
  Best Estimate
 Remainder of Long Lake Leases2. 320
 Leismer2. 591
 Cottonwood3. 517
Total net to OPTI  1,428

Notes:  
(1) These estimates represent the "best estimate" of our resources, are not classified or recognized as reserves, and are in addition to our disclosed reserve volumes.  These resource estimates are categorized primarily as Contingent Resources, with some categorized as Prospective Resources.  See Notes 2 and 3 below.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as Contingent Resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage.  There is no certainty that it will be commercially viable to produce any portion of the Contingent Resources.

Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of the Prospective Resources will be discovered.  If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

(2) The resource estimates for Leismer and Long Lake are categorized as Contingent Resources.  These volumes are classified as resources rather than reserves primarily due to less delineation and the absence of regulatory approvals, detailed design estimates and near-term development plans.

(3) The estimate for Cottonwood is categorized as both Contingent and Prospective Resources.  The estimate of 517 million barrels is comprised of 203 MMbbl of Contingent Resources and 314 MMbbl of Prospective Resources.  These Contingent Resource volumes are classified as resources rather than reserves primarily due to less delineation; the absence of regulatory approvals, detailed design estimates and near-term development plans; and less certainty of the economic viability of their recovery.  In addition to those factors that result in Contingent Resources being classified as such, Prospective Resources are classified as such due to the absence of proximate delineation drilling.